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"A number of those we surveyed, especially the non-savers, say they’re uncomfortable asking for help with their finances. I’d encourage everyone to take advantage of all the resources available to them so they can better manage their current situation while putting away funds for their future retirement."

SAN FRANCISCO--(BUSINESS WIRE)--A new survey from Schwab Retirement Plan Services, Inc. reveals that
everyday money matters are dramatically impacting the lives and
retirement saving efforts of Americans. The nationwide survey of 1,000
workers with access to a 401(k) plan – half of whom are actively
contributing to it (“savers”) and half of whom are not (“non-savers”) –
reveals that non-savers are increasingly challenged by day-to-day
financial stresses, compounded especially by credit card debt.

Regardless of whether survey participants are actively contributing to a
401(k), the majority identify it as a primary source of retirement
savings. In fact, 60 percent of savers and 53 percent of non-savers who
have at one time contributed to a 401(k) say their 401(k) is their
largest or only source of retirement savings, even though the latter
group is not currently contributing. Furthermore, a quarter of
non-savers say they are not saving or investing for retirement at all
right now.

“In comparing individuals now saving in their 401(k) plans and those who
aren’t, we uncovered some common challenges but also a number of
striking differences in the way each group thinks about their overall
financial picture,” said Steve
Anderson, president, Schwab
Retirement Plan Services, Inc. “What’s important for everyone to
remember is that – no matter how far away retirement may seem – the more
you can prepare for it in the present, the better off you’ll be at the
end of your career.”

Workers in the survey identified a number of sources of financial
stress, with non-savers naming present-day challenges in far greater
numbers than their saving peers.

More than twice as many non-savers as savers say keeping up with
monthly expenses is a significant source of stress (42% compared to
20%).

A full 45 percent of non-savers say they either have no money left
over or are actually behind on bills at the end of each month,
compared to 23 percent of 401(k)-savers who say the same.

When asked about their primary obstacles to saving for retirement,
non-savers focused on immediate concerns including: needing to pay basic
monthly bills (46%), paying off credit card debt (42%), covering
unexpected expenses like home repairs (34%), and paying medical bills
(33%). Savers have similar concerns, but generally in smaller numbers:
unexpected expenses (36%), monthly bills (31%), being unwilling to
sacrifice things that add to their quality of life (29%), and credit
card debt (29%) top their list.

In hindsight, non-savers recognize the impact that debt is having on
their ability to save. When asked to select the one thing they would
change about the way they managed their finances in the past, 26 percent
of non-savers say they would have accumulated less debt, compared to
just 13 percent of savers.

Ready or Not? Gaps in Retirement Preparedness Evident

The survey reveals a substantial gap in the way 401(k)-savers and
non-savers perceive their overall financial health. Eighty-five percent
of savers say they are in pretty good shape or very good shape
financially, compared to 64 percent of non-savers.

A closer look at savers reveals they are taking positive steps with
their 401(k) plans, with 66 percent saying they have increased their
contribution percentage in the past two years and 62 percent saying they
believe they are saving enough to retire when they want to.

Outside of 401(k) plans, savings accounts and IRAs are the most common
methods of saving for retirement.

Fifty-six percent of savers have a savings account, and 47 percent
have an IRA.

Forty-four percent of non-savers have a savings account and 23 percent
have an IRA.

More than a quarter of non-savers (26%) are not currently saving or
investing for retirement at all.

“Americans have many legitimate and immediate financial concerns
preventing them from setting aside funds for retirement. The good news
is that both 401(k)-savers and non-savers understand they are
responsible for their own retirement, and some may just need a little
guidance to help them take steps in the right direction,” Anderson
continued. “In many cases, their employers stand ready to help, often
through workplace financial wellness programs, with resources and tools
that enable them to formulate strategies to meet their current
obligations while still keeping an eye on the future.”

Closing the Gap with Financial Wellness and Advice

The survey also reveals that personal financial stress can spill over
into the workplace, with 30 percent of non-savers and 21 percent of
savers saying it has affected their job performance. The majority of
both groups – 86 percent of savers and 77 percent of non-savers – would
welcome a financial wellness program from their employer, which could
provide education, tools and resources to help with their overall
financial health.

However, when asked if they think their current financial situation
warrants professional financial advice, 40 percent of savers and 44
percent of non-savers say no. This is true even though both groups say
their investment confidence would grow dramatically with the help of a
financial professional.

Fifty percent of savers are very/extremely confident making investment
decisions on their own, but 76 percent say they would be
very/extremely confident if they had the help of a financial
professional.

Similarly, 47 percent of non-savers are very/extremely confident
making investment decisions on their own, but 70 percent say they
would be very/extremely confident if they had the help of a financial
professional.

“It’s important for people to understand that whether you have $1,000 or
$100,000, your wealth merits help to maximize its potential,” adds Catherine
Golladay, senior vice president, 401(k) Participant Services and
Administration at Schwab Retirement Plan Services. “A number of those we
surveyed, especially the non-savers, say they’re uncomfortable asking
for help with their finances. I’d encourage everyone to take advantage
of all the resources available to them so they can better manage their
current situation while putting away funds for their future retirement.”

Other Notable Survey Findings

Savers and non-savers alike are self-reliant when it comes to funding
their retirement. Eighty-nine percent of savers and 79 percent of
non-savers say they’re relying on themselves or their spouses for
their income in retirement.

Likewise, Social Security isn’t believed to be a sure thing. Just half
of savers (52%) and non-savers (50%) believe they will receive Social
Security benefits in retirement. Some 21 percent and 23 percent,
respectively, say they will not, and 27 percent of both groups are
unsure.

Savers and non-savers alike spent more time researching their options
the last time they bought a car (4 and 3.7 hours, respectively), took
a vacation (3.7 and 3.3 hours) or purchased a home appliance (2.9 and
2.7 hours) than they did making a 401(k) investment choice (2.5 hours
for both groups).

Even though 401(k) investment fees can have a dramatic impact on
retirement savings, both savers and non-savers say fees are less
likely to influence their choice of 401(k) investments than they are
their choice of a credit card, online shopping destination, ATM or
airline.

About the Survey

This online survey of U.S. workers eligible for a workplace 401(k) plan,
half of whom are actively saving in it and half of whom are not, was
conducted by Koski Research for Schwab Retirement Plan Services, Inc.
Koski Research is neither affiliated with, nor employed by, Schwab
Retirement Plan Services, Inc. The survey is based on 1,000 interviews
and has a 3 percent margin of error at the 95 percent confidence
level. Survey respondents worked for companies with at least 25
employees and were 25-70 years old. Survey respondents were not asked to
indicate whether they had 401(k) accounts with Schwab Retirement Plan
Services, Inc. All data is self-reported by study participants and is
not verified or validated. Respondents participated in the study between
June 2 and June 18, 2017. Detailed results can be found here.

About Charles Schwab

At Charles Schwab we believe in the power of investing to help
individuals create a better tomorrow. We have a history of challenging
the status quo in our industry, innovating in ways that benefit
investors and the advisors and employers who serve them, and championing
our clients’ goals with passion and integrity.

The Charles Schwab Corporation provides services to retirement and other
benefit plans and participants through its separate but affiliated
companies and subsidiaries: Charles Schwab Bank; Charles Schwab & Co.,
Inc.; and Schwab Retirement Plan Services, Inc. Trust, custody, and
deposit products and services are available through Charles Schwab Bank.
Schwab Retirement Plan Services, Inc. is not a fiduciary to retirement
plans or participants and only provides recordkeeping and related
services.(0817-7ANJ)